The legislative history of the Consolidated Appropriations Act, 2004, Pub. L. No. 108-199, 118 Stat. 3 (2004), called for the National Telecommunications and Information Administration (NTIA) to report on “further actions needed in the allocation of spectrum to the civilian sector for the effective deployment of third generation (3G) wireless devices in the United States.” I am writing you today to provide you with NTIA’s assessment of the major actions that must be completed to achieve this objective.

The study, identification and allocation of spectrum for 3G services have required close coordination and cooperation between NTIA, the Federal Communications Commission (FCC), the Department of Defense, and other Federal agencies. Significant progress has been made. In July 2002, NTIA released an assessment (“Viability Assessment’) which identified 90 MHz of spectrum that could be allocated for 3G services to meet the increasing demand for new commercial services without disrupting communications systems critical to national security. On November 7, 2002, the FCC reallocated this 90 MHz of spectrum to fixed and mobile services, making it available for advanced wireless services. On November 25, 2003, the FCC adopted service rules for this spectrum, including provisions pertaining to application procedures, licensing, technical operations, and competitive bidding.

There remain, however, three major actions that should be taken to complete to make the deployment of 3G services optimally possible: (1) enactment of the President’s proposal to create a spectrum relocation fund; (2) completion of the FCC’s rules to identify spectrum for some Federal operations that must relocate; and (3) an auction scheduled by the FCC.

First, as noted in the Viability Assessment, funding must be available for government systems to modify or relocate their systems to make this spectrum available. NTIA has issued rules requiring the private sector licensees that obtain 3G licenses at auction to negotiate with Federal agencies to reimburse the agencies for the cost of relocation. The Administration strongly supports legislation that would change the reimbursement process by creating a relocation fund using auction proceeds. H.R. 1320, as passed by the House, would greatly streamline the reimbursement process, and thus, speed relocation of Federal agencies and private sector access to the spectrum. NTIA urges Congressional enactment of this legislation this year.

Second, the FCC and NTIA must complete the necessary identification of frequencies in other bands to which Federal government systems can relocate. NTIA has identified frequencies in the 7 and 8 GHz bands for Federal government microwave systems to move. The FCC has also initiated a proceeding to make spectrum available in other bands for certain other Federal systems. The comment period for this rulemaking ended on December 1, 2003. It is anticipated that the FCC will issue final rules shortly.

Finally, the FCC must schedule an auction to license this spectrum by competitive bidding. NTIA, however, would not support such an action until identification of alternative frequencies for the affected Federal systems has been completed.

If you have any questions, please feel free to contact me or James Wasilewski, Acting Director of Congressional Affairs at (202) 482-1551.